renaissance in the urban area. it's a great lifestyle. detroit you would think might be the last one or the toughest one but -- >> it's really happening. there's a great music background in detroit. there's a great automobile and car background. it has great museums. it has great assets on a great river. the whole river walk has been redone unlike anything anyone has seen in an american city. we're very excited about it. >> dan, thank you. thanks for the work you're doing. appreciate you joining us today. have great weekend, everybody. right now it's time for "squawk on the street." >> up 146,000, that's the jobs numbers for november. unemployment at 7.7. that's the lowest in exactly four years. good morning. welcome to "squawk on the street." i'm carlos gutierrez with jim cramer, david faber and melissa lee. questions remain about the internals. europe is reacting to a miss on

german industrial production and some reports at least that some ecb members favored a rate cut yesterday. our road map will go like this. that puzzling jobs number beating virtually every wall street estimate as the labor department says sandy had only a minimal effect. is it true a clean number and what are conspiracy theorists saying. a comment hastings made last july. what does it say about s.e.c. rules and whether they are out of date. >> mcdonald's will post same store sales on monday gets an upgrade to buy taking the forecast to a street high after surveying franchisees. we begin with november jobs number. 146,000 nonfarm jobs added last month above forecast of 80,000. october and september payrolls were revised lower. unemployment rate fell by 0.2 to 7.7. that's the lowest in four years. the dip occurring mostly because

more people stopped looking for work and were not counted as unemployed. as for hurricane sandy, the labor department says the storm did not substantively impact the november results and that probably was the biggest surprise to everybody. >> this is a very strong number. i think only u.s. government now can stop this kind of job growth. a fiscal cliff go over -- >> snatching victory from the jaws. >> a superstorm. nothing can stop the generation of jobs in this economy. >> there's a great article today in one of the papers about how apartment building, we have a shortage of apartments and shortage of housing and shortage of autos and shortage of office buildings developing, shortage of shopping centers, shortage of shopping malls. this is what begins a movement. you have to hire eventually. now you could say people are not looking for work, come on. look, jobs are here. they can -- it can be just easily reversed if you have no idea what is the future because

of washington. >> given the data points that we've had in terms of claims numbers that did reflect an impact from sandy, they said 85,000 jobs or 86,000 jobs were sliced because of impact of sandy. average hours worked unchanged. doesn't that -- i don't know -- doesn't that bring into question a little bit the participation in the survey. how can it have no impact whatsoever? it seems curious to me. >> it does call into question whether these numbers can be accurate. we have been starting to think let's check accuracy. why isn't this done by s.a.p.? why aren't numbers done by oracle or salesforce.com. >> those are private companies. i'm just saying that you wouldn't question the data if it was done by a company that got a contract like s.a.p. and put these numbers together. i am beginning to question how these numbers are put together. that number was -- i agree with you. sandy has no impact?

>> on number of hours worked. >> a lot of country was shut down during sandy. >> even before the number hit, people were saying you got to incorporate poll workers for the election. you had holiday hiring. you had sandy. i mean, it may be -- the journal argued it's the least important jobs number in five years. >> i saw that. i do think one thing we can certainly say given that china seems to be stabilizing a bit, we can all discuss europe. greek situation. maybe it's off the front pages for a while. and so if we assume that the jobs picture in the u.s. is not bad, let's assume not bad, it puts even more of a focus on the fiscal cliff negotiations because it becomes even more binding one would assume in terms of good or bad for the market, for the economy. >> kernen had a good point. does strength mean the economy could handle a cliff or is it so good you wouldn't want to tamper -- >> if i wanted to create a

recession, what would i do? i would raise everybody's rates. i would cut the unemployment benefit. just trying to think of a theory of how i could cause a recession. i would cut back government spending quickly. >> i would raise interest rates to 20%. >> bernanke ought to join the -- look, i think this is what's going to happen. i think it's 50-50 we get a deal. no vacation. no legislation, no vacation. i think that when people get their paycheck at the end of january, they are going to be shocked at how much lower it is. i know these guys in washington, their paycheck isn't affected. i think when you get your paycheck, you're going to say i hate that. it is going to be that big. it's going to be very -- the takeout is going to be big. amt at the end of the year, you'll write a check when you're supposed to go to macy's because you can't believe how much -- this is a terrible thing.

those that think it won't matter, i think paychecks must be so big that maybe it doesn't impact. >> part of the 2%. >> there should be a deal. >> i think there should be a deal. i want spending cut big. democrats, i don't want my taxes raised. as soon as you say that it's okay that we have tax increased, republicans say you're not in favor of spending cuts. i want spending slashed. you can't make up the budget deficit just by raising money from rich people. >> let's talk netflix. receiving wells notice from s.e.c., regulators warning they may bring civil action against the company and the ceo for violating public disclosure rules with a facebook post. back on july 3rd, the ceo posting netflix a monthly viewing exceeded 1 billion hours for the first time ever in june. the s.e.c. requires public companies to make the information public. hastings says he didn't believe the facebook post was material

information although that day the stock was up 13%. in a letter yesterday, he also suggested the fact the post was assessable to more than 245,000 subscribers to the page makes it very public. you can choose to disclose information through other venues considered fair that may reach fewer people at the end of the day. >> ain't up to you. it's up to the government. >> rules are rules. >> and these things do need to evolve. there is little doubt about that. i remember when fd was put in. i would have conversations with executives and say you can tell me -- i'm on cnbc -- i will make it public. i'm not going to do anything else with it except incorporate it into a story i was using. it's taken us a long ways from the days when an executive would sit down one-on-one and share things they should not have or at least they shouldn't have shared with everybody or even

analyst meetings that were closed. i remember getting thrown out of time warner analyst meeting many arizona ago. it's hard to imagine. they saw me in the bathroom and said -- the head of pr says you have to leave. that's where we were not that long ago. i was just making my hair look good. >> right. >> it's always an issue. i would be allowed to stay if that was the issue. david, do i have to be friends with hastings? i don't want to befriend him. >> what if you don't want to go on facebook? >> or does one go to facebook for financial information? i mean, what if you disclosed something to a large newspaper in some other country where nobody -- the number of followers, the absolute number of followers may be large. >> how is that more fair? >> it's questions for the s.e.c. we use twitter all -- many of us. i used it as a wire service frankly. and then i use it also to

distribute news. i distribute that news of course on cnbc as well but i use it as another channel of distribution. should that be considered fair disclosure? >> there was a discussion about the notion of free speech. s.e.c. does not care about the first amendment. they think that this interstate commerce clause and that the securities and 34 act just completely trumps that. the idea of making a first amendment case is just stupid. they're not going to let you do it. they don't recognize it as part of commerce. >> it will be interesting. wells notice means they are likely to take action. defense here. you can still make it. it gives the opportunity to at least make a final defense so to speak as to why they shouldn't take action. we'll see what that defense is when mr. hastings -- we have a sense for it given what they wrote yesterday. >> i'm sure it will be closely watched. we should be clear that we didn't see too much reaction in the stock for good reason. this is really a slap on the wrist in the scheme of things. this will be closely watched

because i'm sure other companies will want to know whether if they tweet something, is that fair disclosure. if they use facebook and that will have ramifications in terms of how companies choose to share information with investors. the other point that it raises just thinking about information that can move the markets, this is separate from the s.e.c. in a wells notice, there are many days where we have economic data that is released and it is released a few minutes beforehand to subscribers to that service. is that fair? that's not the s.e.c.'s purview but it raises issues of what is assessable to the broader public versus to subscribers either to facebook or a service. >> interestingly on the stock, even though the s&p is not above 50-day moving average, there are hundreds of components above that. netflix trading above by the biggest amount. number three on my list. >> they are going to pay disney a lot of money. the stock right now is in that

exact opposite mode of what it was in before. everything good -- everything is now reflected through positive prism. next thing you know we'll have to watch the program that you have -- >> there's another season coming out apparently. they've gone into another season of production on that. >> meantime, shares of mcdonald's are higher in premarket. janney finds that franchisees will take it from buy to neutral. sales may have been better than analysts were anticipated to janney will raise and they see flat sales from mcdonald's in december. not the only call out there. deutsche has one too. >> the downtrend is pronounced. it's big because there are a lot of people that have fled the stock. the stock did go up yesterday up again premarket trading. i do believe that if you can

reverse the u.s., the stock can go to the mid 90s. there's so many people negative on mcdonald's. an incredible negativity. >> the caution in both of these is that it is coming up against tough comparisons. december of last year showed growth up 9.8%. the anticipation is that things will get easier because comparisons will get easier as well. >> i would like to know the components. what is selling well? what did they do? a lot of what happened in skinner's final years, new products. a lot of people felt that momentum was they got you in and they had some surprise factor. a wow factor. i don't know. >> does this wow you. fish mcbites or onion cheddar burger. both will debut on the dollar menu by the end of december. >> it would wow my cardiologist. >> fish mcbites are round balls

of fish. >> of corn? >> are they fried? chicken mcnugget is largely corn. >> do you think it's largely corn? >> i'm just being -- >> me. >> i'm being you. i'm being me and you. chickens eat corn so they are basically corn. corn substitutes because chickens can't stand up and so the whole thing is corn so you're eating a corn ball. >> they have a new head of u.s. and the stock is in a show-me stage. climbing into the mid 90s as you suggest. >> it's been on hiatus. people love a new name. remember, a lot of -- yum had a big analyst meeting yesterday. some people are circling back to that. howard schultz told a good story

at starbucks. people are desperate to find something new to buy. >> and in an environment of rising employment, that's a big deal for mcdonald's especially in the breakfast business which is a high margin business. it is highly leveraged to macro indicators too. >> when i go there, there's a promotion going on that didn't bring me into the store. i want to be brought into a store because of a promotion and not discover, wow, i paid much less than i thought. >> i told you about mcbites. will you go into the store now? >> i think they are called mccorn balls now. we changed the name. >> melissa is up to date on the menu. >> yesterday it was mcrib. >> these are very important to the stories of these fast food chains. that's why i'm so -- >> what's the calorie count? when you see the calorie count that's the determinant. can i have three lipitor. >> that's what i'm on right now.

>> are you really? where is your bad cholesterol? >> it's not good. not good. >> mine is 80. >> goody for you. that's what happens when you get old. you compare cholesterol levels. >> i went to trader joe's last night. turkeyless turkeys. for the record, what's not to like. >> when we come back, we'll get some serious news on the show somehow. the administration's take on the jobs numbers coming up. white house economic adviser alan krueger will talk to us. in the next hour, one of the best performing stocks on the s&p all year long, whirlpool. ceo jeff fettig. what does the head of the world's largest appliance manufacturer have to say. back in a minute.

take a look at the futures. reacting to a better than expected jobs report showing the month of november adding 146,000 jobs. unemployment rate edging lower to 7.7%. implied open on s&p 500 up 4.25

points. a plan to shift concentration away from making hardware to designing software and services for data management at cisco. the ceo saying he wants to double software revenue in the next five years which today is a business of $6 billion. cisco sites slowing growth in economic demand due to the economic downturn and increased competition. looks like cisco is looking to gradually change to an area that would bring it more revenues overall higher margins in theory. >> i wish them luck. there's a competitive market there. you want to move into that competitive market. good luck. it's very hard. everyone knows that they don't spend like they used to. if this is an attempt to get into big data more than they already are. you would think they already have this. they think they need to do much

more. the stock is inexpensive. doesn't seem to get traction. >> chambers gives an interview to "times" saying of the big five or so, two or three of those will not be on that list in the next five years. >> microsoft struggles for relevance. >> who struggles more? >> the stock is acting nicely as of late. >> nice for hp the last couple weeks. >> it doesn't have any tax pressure. there's no fiscal pressure in terms of locking those gains in. >> no risk of that. how do you get off to a fast start on this jobs friday? cramer's mad dash is next. a view from the buckeye state. former ohio governor ted strickland on today's numbers and what he sees as a solution to the fiscal cliff. let's look at futures once again. holding onto gains. dow looking at 44 at the open.

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and low-cost printing. about seven minutes before the bell on a friday. we'll get jim's mad dash. we talked mcdonald's which means you have to talk yum. >> kentucky fried chicken was battleground. how good is china? how weak is china. don't worry about it. unit growth coming back. china will follow in terms of

same store. the market disagrees. i think the stock is very cheap. it's show me. until we see an inflection point in china, right now people feel like it's gone like this. be careful. yum. >> there are some lonely bulls out there on yum even at these levels. >> i happen to think that the united states could turn. i like the ceo. he's always reacted to whatever is bad. i don't want to write-off yum. i feel like this was so devastating. i got to see something positive before i can come on this show and say buy it. >> how about wsm? >> here's a terrific report. they say the growth story is unappreciated. william sonoma next week pier 1 reports next week restoration hardwa hardware. everything in the house is doing better. possible sandy story. possible employment story. where would those employment numbers be had it not been for sandy?

business is real good for ll. no one wants to say our business is great because of sandy because of the loss of life and the tragedy. but look out. a lot of these companies are going start reporting better numbers because of sandy. >> it's a good line of questioning for whirlpool. >> is it ever. raw costs are coming down. >> that's a lot of good information. when we come back after a break, the november jobs number. the sandy effect. job creation. the fiscal cliff. we'll talk it all with top white house economic adviser dr. alan krueger. shares of whirlpool have more than double d this year. an exclusive with the ceo is coming up and opening bell on a friday morning is coming up next. can i still ship a gift in time for christmas?

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data in europe. the scuttlebutt that some members wanted to cut which has put pressure on the euro today. >> german market up twice what we're up and i think people are shaking their heads that netherlands could be up. we don't see any data whatsoever that europe is doing better but belief that 2013 can't be as bad as 2012. german numbers were not good at all. it's a puzzle. >> we did get an earthquake in northeastern japan overnight. 7.3 is serious. looks like we dodged a bullet on that front as well. doesn't look like there's any damage as a result of that. >> i thought there would be a tremendous rebuilding effort in fukushima. it didn't happen because the ground is contaminated. the first question they asked over there were nuclear reactors apparently safe is the early word. >> we walk in on monday we'll have a lot of data out from china which could be important given the biggest weekly gain in

shanghai in 13 months. that will be closely watched. industrial production and retail numbers will be out and everybody is watching it closely. going to the notion that china is on a rebound extending the gains that we've seen in shanghai off very low basis for the year. >> why do you think it's been so not great in the last seven? >> that's a very good question. very good question. >> there's the opening bell on s&p 500. top of your screen at the big board. celebrating a recent listing of the global short duration high yield fund. over at the nasdaq, the cast of the broadway show spider-man turn off the dark. >> how can there be four of them? there's only one spider-man. >> meantime, keep an eye on apple. more discussion about production of macs coming back to this

country. company tells the journal not just assembly. not just putting together parts made in some other part of the world. >> i think that as much as i know people quickly will say come on. it's just window dressing. apple is gross margin orienta orientated. it is emblematic of what i see happening. cheap to build things here. it's energy costs so much lower than around the world. labor costs -- look at these labor rates. people are not working for much more money. there is slack in the system. it's a developing story. >> tim cook in yesterday's interview on rockcenter said it's the lack of manufacturing skills. they have to look overseas to manufacture their products. i thought that was interesting. there's a notion here in the united states that it's always

about cheap labor. cheap labor. that's why you go to china. not necessarily entirely the case. >> a lot of manufacturing jobs require a certain amount of math skill now that was not required 20 or 30 years ago. unfortunately we hear time and again from chief executives, they have hard time filling those fairly high level manufacturing jobs, high skill required manufacturing jobs. >> this is what ceo of general electric stressed in the jobs council for the president, listen up, mr. president. junior colleges is where you can make a difference. >> vocational skills. >> i don't feel it's -- look, washington is focused on different things across the board. >> look at shares of freeport mcmoran catching a bid after the deal. a complicated deal that david faber walked us through. people are seeing at least some value in decline and shares

of -- i'm so used to saying decline with hp. >> freeport-mcmoran. >> very tight as we knew it would be. not requiring shareholder vote as we already had known detailing the $9.5 billion loan they are taking from jpmorgan. the key take away, you're not going to get a chance to say no here. this is happening. they are buying mmr. at least today the stock is up after what had been a terrible performance during the last two trading days. >> explain capitalism to me for a moment. you have a publicly traded company where one person owns a huge chunk who also happens to be the ceo of another company that is buying them. >> chairman. >> chairman. yes. here's what i'm concerned about. this company's stock plummeted because of davy jones. it's pretty clear that i think that there will be few companies that will be making an offer for

mmr. >> perhaps not at that premium. 74% premium and also then you get part of a royalty trust so even more than that. >> we say the guy owns a big position so it's okay? >> there's a lot of relationships. he benefited enormously on paper from owning mmr to his ownership stake there but he lost a lot from his ownership stake in freeport. >> the s.e.c. is after -- >> you have directors all over the place. you have people advising independent directors. you're right. plenty of relationships that make people queasy and hence they sell. >> quick note here before we toss it to bob. bank of america continues its tear up 1.75% new 52-week high in today's session of 1064. on our radar this morning. let's send it over to bob with more on what's moving. >> happy friday. what a week. futures popped ten points on the jobs report even though october

was revised downward rather notably. a good open. materials, techs, financials leading the way. i wish i could be more optimistic on the fiscal cliff. a gloomy commentary this morning. expectations are getting narrow. grand bargains are out and the idea of maybe the fallback position is pass a simple tax bill like the one the senate had. the simple bill here. you have tax cuts for middle class but not for people over 250,000. you have dividends and capital gains going to 23.8%. that's the senate bill. and that's it. you leave out estate tax and leave out payroll tax cut and unemployment extension and you leave that out. no delay in the sequestration. this is pretty thin gruel. this is what's tossed about and talked about today overall. is that enough to satisfy the markets? remember, the two requirements, got to be before the end of the year and got to be substantive. before the end of the year but that doesn't sound substantive to me. i think there will be disappointments if that's all we get. did you see china?

remember the bidder complaints two weeks ago. no efforts from chinese leadership to talk about the economy next year. now it's happening. we have another big move up in chinese mainland stocks today. up over 1%. we're up 4% for the week in mainland china. the leadership there has been talking stimulus this week using words like urbanization. that means stimulus. hopes now they'll release reports shortly affirming 7.5% gdp growth for china in 2013. that's what we have for 2012. affirming the same number for 2013, that is signs of a bottom. people are getting more optimistic. hong kong has been doing very, very well. mainland chinese investors have had an ugly time. did you see what's been going on in germany? they came out and acknowledged there was a possibility of a recession early next year in germany. that's a real concern right now after germany has a new 52-week high in stocks. you'll have strong headwinds in december and january for the

german market. they are talking about growth of 0.4% next year for germany gdp. it was 1.6%, guys, just six months ago. that's a pretty severe downgrade. back to you. >> wae'll see you later. as we said earlier this morning, u.s. job growth picked up in november with nonfarm payroll increasing and unemployment rate falling to 7.7%. the lowest level since december 2008. joining us from the white house this morning for our first on cnbc interview is alan krueger, chairman of the council of economic advisers. good morning. >> good morning. >> as residents of the northeastern united states, a lot of us are still trying to get our heads around the idea that sandy didn't affect these numbers at all. are we almost certain to get some major revisions next month? >> the bureau of labor statistics reported that they didn't see a substantial effect of the hurricane on the top line numbers. however, the report does show that over a million workers

normally working full time worked part time during the survey week which was a result of the storm. so i think we see lots of indicators that the storm is having an affect. today's report shows a picture of the economy continuing to heal but there's a long way to go until we're back to full health and that's why the president has been pushing congress for a balanced plan to address our fiscal problems and support the economy. >> all right. speaking of which, i'm glad you brought that up. our steve liesman interviewed the treasury secretary a couple of days ago and had a question for him. i wonder if you would listen to this piece of tape and get a reaction on the other side. >> i want to understand the administration's position when it comes to raising taxes on the wealthy. those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> absolutely. again, there's no prospect to an agreement that doesn't involve those rates going up on the top 2% of the wealthiest americans. it's only 2%.

>> dr. krueger, as the man who is maybe more than anyone the steward of the economy itself, are you okay with that? >> absolutely. the president made clear during the election that he wants a balanced approach, that we can't afford the tax cuts for the most fortunate among us. that the way to provide opportunity and build the middle class in this country is to get on a fiscally sustainable path and to ask wealthiest to pay a little bit more. president couldn't have been clearer about that. >> at cnbc we have a campaign called rise above. and the essence of rise above campaign is there should be more spirit of compromise. there was no compromise from treasury secretary geithner in that interview. would you wear a rise above pin and would you rise above? >> i think the secretary, the president, have drawn very few red lines here. the president has made it clear that he's not going to sign the extension of the bush tax cuts for the very wealthiest.

he hasn't said my way or the highway. he's made it clear that he's willing to negotiate but the math has to work out. he is still waiting for a counteroffer to be proposed where the math does work out. >> dr. krueger, we added an average of 151,000 jobs over the course of the year with only one more -- with one more to go in terms of an employment report. in a posting this morning from you, a statement from you, you talk about the addition of $2,200 tax increase for middle class taxpayer in this country should of course we go over that fiscal cliff. what is that going to do to the economy and ability to create jobs next year? >> the last thing the economy needs right now is for a big tax hike on the middle class. the $2,200 tax increase for the typical family you alluded to, we calculate that would cause consumer spending to fall by $200 billion next year. that would cut the growth of

consumption by 1.7 percentage points and shave 1.4 percentage points off gdp growth. there's a simple solution here which is just to extend middle class tax cuts which the senate has already done. >> we got good numbers this morning. i'm willing to take them at face value. better than a bid. not great. we want 400,000 jobs. do we still need to spend so much money on the payroll tax cut and extended unemployment gains given the fact that we got good news today? >> first and foremost, we need to extend middle class tax cuts. that should be our highest priority. the economy can still use support in the short-term. i think the more we do for the long-term to show that we're on a fiscally sustainable path that gives us more room in the short-term and today's report and frankly the past 33 months where we've had continuous private sector job growth should provide some confidence that the policies the president has pursued have been effective. have been helping us to dig our way out of the deep recession that started back in 2007.

>> dr. krueger, looking at some of the internals, unemployment duration, average duration of the unemployed, those numbers are starting to tick down a bit. i wonder if you think we're actually starting to chip away at the longer term structural challenges that the labor market faces. >> we have a very long way to go. i would say even before the recession we had structural challenges. even before the recession the middle class was under a lot of stress and particularly those struggling to get into the middle class were facing an uphill climb. we'll work at the type of policies that help the middle class and help those struggling to get into the middle class. >> dr. krueger, thank you for your time. >> terrific. >> thanks for having me. >> let's get reaction from the bond pits on this jobs friday. a lot of news here. rick santelli at the cme group in chicago. >> hi, jim. of course the floor is debating many of the topics you were debating with dr. krueger. you know, the drop-off of

hundreds of thousands of people from the force of the unemployed, dr. krueger is right. the president's programs are working. we're taking care of people that need help but we're not finding a way to get them a job to contribute to the tax base. how did the markets react? they did scratch the surface and look at the headline number being better than expected even though as david pointed out 150,000 average is nothing great to be proud of. we popped a few basis points. even the bund pattern. maybe on the floor say that's probably what's in store for our ten-year. tens and 30s did stick. five year didn't. longer maturities have issues with q-4 quantitative easing coming down in the next fed meeting. the dollar had an interesting move. whether you looked at the euro moving straight down at 830 or looked at the dollar/yen and

looked at dollar moving up dramatically against the yen at 8:30 eastern, it does seem at least for now that the dollar index knee-jerk reaction is correlating with what was perceived to be better data. now on china m&a front, it's our own david faber. >> all right. thank you very much for that introduction, mr. santelli. and we did want to take a look. interestingly as we well know numbers when it comes to merger and acquisition activity for the course of this year with one month to go disappointing certainly at least given what had been assumptions it would be a strong year when the year began and remember it was a somewhat strong year in so many different ways until we sort of ran into that end of the first quarter into that spring yet again dealing with problems in europe and then we have taken it from there. we're not going to be up this year. china a record. $145 billion in fact is an all-time record according to thompson reuters which follows these things and keeps track of them. we're talking, you know, latest

deal hsbc $9.4 billion sale. 15.6% stake in insurance group to thailand based investor group but we're talking about cross border when we talk about china don't forget. we focus so often on u.s. and u.s. companies. the chinese may not be doing a lot of investing for various reasons including political considerations, but they are investing around the world aggressively when it comes to resources. no deal more reflective of that than the one we are waiting for, investors in takeover space are waiting for approval if it does, i'm talking about cnooc's. we'll see if that deal is going to occur. many expect that it will. that seems to be where it is. one never knows on these important issues but again

another deal, important deal adding to that very large total for m&m out of china. >> something to watch going into 2013. whirlpool has had the fourth best performance on the s&p 500 so far this year. we'll talk to the ceo about his plan to expand in the united states coming up in the next hour. more reaction to this morning's jobs report. it's an exclusive with goldman sachs chief economist jan hatzius. early movers topped off by sears up 4.5%.

i'm sharon epperson at the nimax. interesting action with gold prices. right around $1,700 an ounce level. we're seeing some interesting reaction in the oil markets where oil prices rallied initially and have come back a little bit off of their highs of the session. keep in mind we're watching oil prices not only for what is happening with today but of course what oil traders are looking for in the week ahead.

we have opec meeting on wednesday, which could certainly add to the price volatility and price reaction there as well as whatever happens with the fed. back to you. >> thank you very much, sharon epperson. the big jobs report shows 146,000 jobs were created last month so we asked did you nail the number? all this week we asked you to tweet us your predictions for the november nonfarm payrolls figure. right now the "squawk on the street" team is going through the entries. the locucky winner will receiven oof autographed picture frame. good luck. >> i did not guess well. i thought sandy would have more of an effect. >> where would numbers be without sandy? would we have done 200? >> more economic data on wall street's radar this morning and minutes away from break news on consumer sentiment at 9:55. don't go away. ♪ >> announcer: coming up, cramer

is kicking it into high gear. his six stocks in 60 seconds will energize all of us. get your jim jolt when "squawk on the street" returns.

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six in 60. >> i picked this because of the movies. people think the fourth quarter will be really bad. i'm not excited about the movies fourth quarter. i don't know if you are. >> i am excited. >> yesterday clark came on it love him. ceo was cautious. all canadian based downgraded today. maybe it's brother against brother. i don't like the manning versus manning super bowl. >> barkley starts hertz with a buy. >> rental cars are big. they eliminated a competitor by a merger. these are good stocks. >> look out samsung may eventually lose some apple business. >> jpmorgan neutral on marathon. >> i think that's a mistake. i think this marathon is worth a great deal of money. >> and jpmorgan upgrades aetna. >> people were supposed to hate them ahead of obama care. stocks doing well. what's coming up? >> i want to do disruptive

companies and i watch "squawk." this company is one that has a stove you can put in a couple sticks of wood and starts and generates electricity. you can then charge your ipad, your iphone, you no longer have to be hostage to the grid and they did it -- it caught my eye during hurricane sandy. brooklyn company. the fire department use them. everyone is using them. >> you are doing more private companies with disruptive technology. >> i think that the exciting part of america is we have the world's greatest technology. i want to point it out. many companies are private. >> santelli has -- >> you have to be kidding. rick santelli here. welcome. my goodness. 74 74.5. i had to double-check that one many times. we're coming off numbers at 82.7 for number. 82.6 for october. those are close. the best numbers since the fall of '07. this 74.5 is a really big drop

that takes you to the weakest numbers since august when we had a series of weaker numbers. now, whether superstorm sandy had an effect i can't tell you. what i can tell you is that this is a preliminary december read and all comps i'm giving you are final reads. this will change in a couple of weeks. on the surface, not a very good number. the response in the marketplace, not a huge response at this point but remember the market still trying to digest real from memory with regard to actual positives of the jobs report and it's a weekend. back to you. >> thanks a lot, rick. rick santelli. it does sort of point to a market that some argue is overly hedged. the rallies that nobody believes and firm on bad news as some say. >> the only thing i know is if you have capital losses, don't take them this year. more valuable next year. maybe that's why hewlett packard is going up. people aren't selling losers because they are worth more to

sell next year against higher capital gains. >> have a great weekend. >> football. football. >> a great day. when we come back, a pair of exclusives on "squawk on the street." whirlpool ceo on jobs, the economy, the cliff and of course his company's red hot stock and you want to hear goldman sachs chief economist has to say about the jobs number and of course his outlook for 2013. keep it right here. o as you cans customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please?

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welcome back to "squawk on the street" for a friday morning. our road map for the next hour goes like this. an unexpected jobs number today. u.s. creating 146,000 jobs in november beating nearly no program. we'll get reaction from top tier economis economists. >> reed hastings receiving a wells notice about a comment he made last july. so does a post on facebook count as fair disclosure. >> what's the head of the world's largest appliance manufacturer saying about jobs and the economy?

whirlpool ceo is here. washington state's new marijuana legalization law took effect late yesterday. will the federal government seek to block the new law? we'll answer that. let's get breaking news here. hedge fund john paulson hedge fund manager having another tough year. official numbers for the month of november. >> so november proved to be another difficult month for john paulson. his advantage fund which employees strategies from each of his individual strategies was down about 3.6% making it down more than 17% year-to-date through the month of november. that means his advantage plus fund which is a more levered version of that is likely now down more than 20% year-to-date through november. also his gold fund, a very difficult november down about 9.5% in gold, which leave it is down close to 30% year-to-date

again through november. this is a very disappointing performance on an absolute basis but also on a relative basis. if you look at hrfx which is a hedge fund put together, it's flat and up about .4% year-to-date. certainly not screaming good performance but certainly better than how paulson is doing. and then if you look at hsbc report that's quite popular that tracks a lot of well known hedge fund results, they were ranking as of end of october paulson as the second worst performing fund. that's advantage fund year-to-date through the end of october. it's unclear whether they will hold onto that position based on this month but clearly it doesn't help. we just have to see what other hedge funds are doing in that universe. >> it's staggering to just pull up the gld which is probably a very wildly held etf that tracks gold. that's up 9.75%. investors are paying presumably 2 and 20 on this. >> the issue in that month

particularly was gold miners are having a very difficult time and the gld is a good thing to point out. not only a good proxy for metal which paulson is also in but paulson uses gld to put his investors into gold shares as a currency. one upside for him is that investors have the option of using gold shares for any of his funds that they want to. so about half of his advantage investors do that and they are performing significantly better than those in u.s. dollars, which are the results we just shared with you. >> what's the future for paulson? as you pointed out, another bad year after what were some very good ones, let's not forget. he's probably lost more money than he's made as a hedge fund manager when you take the total given how big he got and what he loss since then. his own money and his employees. >> that's a very good question, david. i think paulson definitely has a lot of money invested in these funds. so there certainly is a stable capital base there. in terms of how much he's made and lost, he was about north of

38 at his peak and now closer to 20 or a bit under 20 based on this current month. it's a big down tick. if you were in the advantage funds early on before the subprime short that made him wealthy in 2008, you would be up by hundreds of percentage points. depends on your duration in the paulson funds how you're doing overall. >> that's true. it depends on patience on whether you will stick with it his last two biggest directional bets that he's known for is he bet on a big recovery in the u.s. economy and had money heavy into banking shares and then earlier this year he told investors at an annual meeting this week he was betting against european bonds. and that did not work out. >> i think europe this year has

been such a mixed bag. paulson has obviously faced some losses based on his european strategy. at the same time, you look at dan who runs third point. that master fund is up 17% or more year-to-date right now. and they have bet dramatically on greek bonds among other things and done very well. it's really a matter of picking your spots. it's obviously a difficult time when it comes to europe. i agree on the patience point. recovery strategy, gold strategy are his big thesis out of the credit crisis. to be fair to them, gold has longer term before we can judge whether it worked out. they consider it to be a multiyear thesis and one we need to spend two years waiting for. in the meantime, there's no doubt that results are very disappointing on a month to month and year-to-date basis. >> all right. thanks for bringing us those numbers. >> headlines on aig this morning. a chinese company in talks to buy a portion of aig's unit. kayla tausche has more on that.

>> aig is in talks to sell that unit not limited to chinese investors according to sources familiar with the matter and the unit has been for sale since it filed for ipo in 2011 and previous attempts to buy it outright were thwarted preventing foreign buyers to own more than a quarter of all voting shares. reports that this group would be led by new china trust company but sources say it would need to include u.s. investors because the bylaws still say the president and at least two-thirds of the directors and managing officers be u.s. citizens. now exact structure in price of the deal are still unclear. we should know in just a couple of days aig spokesman for that matter declined to comment. aig ceo has pointed to a book value of $7 billion for ilfs and said he would not sell or ipo below that price which interestingly the reported price tag of 5.5 billion is below that

price. aig had been prepping that unit for a multibillion dollar ipo which my sources say was shelved for 2013. sources say the ipo was set to include a 15% stake from various sovereign wealth funds. high exposure to that business. interesting to see what investors get a part in this deal. >> it's a fascinating part of aig's empire. that's for sure. thank you for that. kayla tausche back at headquarters. november nonfarm payrolls up 146 beating streets estimates. steve liesman is here with an in-depth look at the numbers and maybe an explainer as to why sandy didn't have more effect this month. >> i wish i could answer that question, carl. you would have thought there were lots of expectations. very quickly i want to talk about the sentiment numbers. the reason why we had that big miss on sentiment is the bottom dropped out of expectations.

the assessment of the current situation actually was pretty decent but in fact i think it ticked up. it stayed about the same at 89.9. expectations dropped pretty strongly down to 64 and that could have been two factors in there. the first factor could have been -- we'll get to jobs report in just a second. the first factor could have been the fiscal cliff situation and sandy as well. also, our all-america survey picking up the idea that there was some effect of the election where sentiment of republicans dropped very, very dramatically. let's talk about jobs report. 146. this was not affected by sandy despite big expectations it was. in that unemployment rate, you might have had the declining rate that could have been the result of people not looking for work because they wouldn't look for work. that might have been the reason why 350,000 people left the workforce. total revisions were negative 49,000.

a lot of that in government average hourly earnings. not a good number there unchanged. let's look at the details of the report. what you see is private sector did gain 147,000. construction fell off. i thought that could have been sandy. it also could have been a snapback from prior month. manufacturing down 7,000. services up 169,000. flattering the overall number is that big jump in retail. early thanksgiving meant early hiring. in general earlier novembers are associated with bigger jumps compared with october. just want to show you the labor force right here. what's been happening. you did have two big gains the prior month. maybe that's a falloff. maybe there's sandy effect in there. overall, guys, it may suggest stronger than we expected underlying growth rate. maybe in the 150,000 and we'll have to wait and see if we do get a big sandy effect, the concept was that since the government had pulled forward

the date of the week, the government saying it did not. >> they are clear on that. thank you very much. for more on this headline figure, a gain of 146,000 in nonfarm payrolls, let's bring in the chief economist. diane, let's just recap the context here coming into what we had today. obviously the consumer confidence figure we just had is disappointing. for the entire month, the weekly jobless figure was elevated up about 38,000. the employment components of both the ism manufacturing and services were deteriorating and we have a storm that caused $75 billion potentially of physical damage. how then can we get the jobs figure that's twice what the market expected. >> a couple of things. to add to steve's comments on consumer sentiment, all of the decline in consumer sentiment occurred in households earning more than $75,000 a year.

there really is a fiscal cliff and concern about rising taxes in those consumer sentiment numbers creeping in and those higher income households pulled back on spending expectations on big ticket items of vehicles and appliances and consumer durables. that's significant. in terms of sandy, one thing i would note is on unemployment survey it was taken on november 5th, the day before the election. remember, there was a nor'easter a few days later that compounded some of the disruptions related to sandy and many of the unemployment insurance claims because people couldn't get out to make the unemployment claims didn't occur until the peak in the middle of november. i think the timing of this survey really did matter in this. steve made a good point on earlier than usual thanksgiving maybe swamping some of the retail effects that we would have seen from sandy because of the seasonals and the way the data was captured. i don't think underlying economy is that much stronger with downward revisions we saw in previous months. i do think the fact that timing and nor'easter was also in here

and that did down airplanes and further exacerbate problems in new york. >> let me pick up that point that you make about the downward revisions. if we are to argue that this number is significantly above market expectations, then the downward revisions that diane refers to fall both october and september in total 49,000. those downward revisions are also presumably significant. >> they do take away a little bit rosy picture that we did have. we see stable job growth of 149,000 a month. when you look at the pattern of where jobs grew and where they shrank, it speaks very much to the trend we've been seeing for some months which is strong consumer, weak business. and that's very consistent with the fiscal cliff weighing on business hiring and investment. machinery equipment in manufacturing employment was down. same with construction of nonresidential buildings. the strong retail numbers which have been strong for a couple months not just in november

suggest the consumer has not been hit by the cliff. one other point about the hurricane impact, we don't know what the bureau of labor statistics considers substantial. according to ma ing ting t ingi 300,000 said they weren't working because of the weather and that's six times the normal level. >> to underscore the statistical significance, 86,000 was in the adp report affected by the hurricane. that's not within the statistical range with what they consider significant. it did have an impact and it may or may not have shown up. i think greg brings up a good point about the fiscal cliff and the break between consumer and corporate activity is very important. we saw the decline in investment in the third quarter very much related to fiscal cliff issues and concerns and delays on hiring and delays on investment. i also think it's important to point out that the persistence

of high unemployment and greg can weigh in on this as well, i think this report because of decline in participation rate and persistence of long-term unemployed and the number of people basically unchanged that are accepting part time instead of full-time work will add to the fed's decision to stimulate further next week as well. >> is that a foregone conclusion? more stimulus from the greg and how does this number, if at all, enter into the negotiations surrounding the fiscal cliff given the break we're seeing in behaviors of the consumer versus business. >> it doesn't change the outcome of next week's meeting. they expect the bond purchases to remain at $85 billion a month. the more interesting question is there's an ongoing debate within the fed right now whether they should set a threshold for the unemployment rate to tell people when they will start tightening. the unemployment rate continues to come down faster than the fed expected and faster honestly than underlying strength of the economy seems to justify. that means if they're going to set a threshold, they have to

set it low so they don't have a rapid drop ahead of when they are ready to do so. >> further underscoring that, greg makes a good point. unemployment rate came down because participation rates fell and the fed is very concerned about including the participation rate in any targets they may set. >> diane, before we let you go, we'll have a guest in 20 minutes and his view is we'll get one quarter percent of growth. should we worry the market may have to catch up and that there is a significant downward correction to come? >> the biggest risk is fiscal cliff. it is a weak fourth quarter. we could have a much better year if we choose to avert the fiscal cliff and move toward credible deficit reduction. if we don't, i think that's the real critical bet is will we get there or not? >> good to see you both. have a great weekend. thank you very much. simon mentioned we're going

to get exclusive reaction to today's job report from goldman sachs chief economist jan hatzius straight ahead. >> who better to sit down and talk with than whirlpool. >> announcer: the number is out. >> november nonfarm payrolls increased by 146,000 jobs. >> announcer: were you able to nail the number? if so, you may be the winner of this picture frame signed by the "squawk on the street" gang. find out if it was you later on "squawk on the street."

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netflix receiving a wells notice by the s.e.c. saying they violated public disclosure rules with a facebook post. jewulia boorstin has details on this. >> this raises two big questions. first, is facebook a platform for public disclosure and second, was the information disclosed by hastings material? take a look at what hastings posted on facebook on july 3rd. that's his post there. he told his 200,000 plus subv e subscribers that netflix viewing exceeded hours in june. look at trading activity on july 3rd and july 5th. hastings posted mid morning on the 3rd.

that day netflix shares had the biggest gain in six weeks. that was followed by a 13% gain on july 5th which was the next trading day because of the july 4th holiday. hastings points to the fact that the stock started to rise well before his mid morning post. hastings says the gains of the day were likely driven by a positive citigroup report which gave netflix a target price of $130. is facebook a forum for public disclosure? hastings says that facebook counts as public because so many of his 200,000 plus subscribers are reporters and bloggers and argues the company blogged that it was serving nearly 1 billion hours per month on its website so it was already pretty close to that. the s.e.c. says that usage figures are material financial information and should be submitted in a press release or in a regulatory filing or what

s.e.c. calls any nonexclusionary method that provides broad public access to information. now, no matter how this one is settled it will have major implications for corporate communications. you can bet that ceos all around the country are sitting down with lawyers to discuss this issue. >> i can imagine investor relation offices all around the world are trying to figure out what this brave new world is all about. thank you very much. julia boorstin in l.a. when we come back, whirlpool ceo jeff fettig. what is he saying about jobs and the economy? he'll lay it out for us after the break. >> and would you like van gogh with your morning coffee? maybe you need something more cutting edge. one company is putting the entire art world at your fingertips. we'll introduce you to the ceo of artsy coming up. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams

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the jobs report for november coming in better that expected. we want to get insight on jobs and manufacturing from the head of the world's largest appliance maker. joining us on the newsline for a cnbc exclusive is jeff fettig. always good to have you. let me start from the broader picture here. you have been having a good year. i'm curious. have you seen any change in the trend or your expectations in terms of sales either up or down as a result of the looming so-called cliff. >> first of all, it's a pleasure being here on your show. we have had a good year in terms of improving particularly our operating margins. the demand trends i would say are the most challenging part of our business. we really particularly starting with the united states and seeing this is now really another year where we're bouncing along the bottom in terms of demand from a

recessionary level down about 25% from the high of 2006. it looks like this year we guided around minus 1% to minus 2%. we've really not seen a change in that trend although there are signs like housing. europe as you know is difficult and negative. asia was surprisingly negative this year. the only regional market around the world that we've seen good growth is in latin america. >> right. where you also have a significant presence. i am curious in terms of your expectations as we enter the new year, if in fact we spoke to dr. alan krueger earlier on the show. $2,200 for the average family is how much it is going to go up. >> i think disposable income reduction will be an impact. if you see household incomes

that have decreased by almost 10% over the last five years and more pressure on that forces the consumer to have choices. in our business i think there's a positive side in terms of demand as we see on the horizon. right now the market is primarily a replacement market. we don't think that will change largely. the discretionary side has been very suppressed. we are seeing signs that we're positive about. improvement in existing home sales will stimulate demand. i think you have to -- what the consumer will have to do is balance that with an overall added pressure if it is decreased. >> one of the keys you mentioned already for whirlpool has been an impact on margin or do you

think they have already been realized? >> we had a great progress this year and it came from a balanced approach to reducing our fixed cost to align our production to today's demand levels. we continue to get great productivity throughout our business helping to offset inflation. the big driver has been the benefits of our product innovation. the ability to even in a difficult market consumers will pay for innovation. that really helped our price mix quite a bit. we see those trends continuing. we publicly said we expected to get eight plus percent operating margin by 2014. we made a huge step forward this year and we expect to continue on that trend. >> jeff, i wonder how you look out in future years and think about the replacement cycle. we're about five, six years out of the housing boom and presumably during the boom there were a lot of new appliances being put in. researching the average life span of various products, dish washers, ten years, washers, 13,

dryers 14 or so. this -- do you think there will be a boom that we saw in 2006, 2007 and 2008? >> no question. if you look at u.s. data for demand, the bubble so to speak really occurred between 2003 and 2006. so beginning next year we'll start the ten-year beginning cycle of replacement. we'll see replacement cycle accelerate over the next four or five years and at the same time we've come from 400,000 new homes a year level, which is 25% of the norm. we still believe 1.5 million new homes is replacement level. it's improving. we're up to 700,000 right now. it has a long way to go.

i really believe that we have a significant amount of pent-up demand today and we will get a catalyst for both housing and replacement cycle over the next three to five years. >> can i ask you about the dollar as a result of the very aggressive policies that we've had from alan greenspan and ben bernanke, the dollar has lost about a third of its value over the last three years on the dollar index. does that mean that manufacturers like yourself will be forced to bring jobs back to america because now producing elsewhere and importing on that currency effect is now 30% more expensive? >> you know, in that case for us, that is not going to have a big impact. 80% or more of what we sell in the u.s. we already make in the u.s. we really believe in production and if you look at our business and all of the large markets around the world, we have established production basis.

if anything, that's perhaps helped us a little bit because we do export about 15% of our u.s. production. overall the biggest impact that the change in currencies have had is really for us the brazilian and indian currencies which have devalued about 25% over the last year. the u.s. dollar change has not had a large impact on us. interesting to hear you talk about housing in this country. sherwin williams, depots, this year have been basing thesis on housing making a bigger comeback than you describe. do they have it wrong? >> no. i think perhaps i was misunderstood what you said. we see new housing coming back significantly. i was just trying to put it in perspective. our view is 1.5 million homes per year is a normal replacement

level. we're coming from 350,000. it's now ramped up to about 800,000 plus. that's a great change. we're still far away from a replacement. i see that as a growth sector for us as do other people in this space. >> real quick finally. you have 22,000 jobs here already in the u.s. most are manufacturing here. apple is going to start to make some stuff here again. the i mac computer. is this something we'll see more of? >> we repatriated a number of jobs from outside of the u.s. we brought jobs from mexico and europe back into the united states. we've been doing that as well. i would say the largest impact on jobs, however, is growth and demand. if we see demand growth, we'll be adding more jobs. >> all right. jeff fettig, appreciate it. >> coming up next, u.s. job

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november jobs number coming in as quite a surprise to most. the street believed the numbers would be significantly lower due to sandy's impact. the labor department saying that was not the case. joining us exclusively, jan

haszius. will we come in next month with huge very rigrevisions down to number. >> i don't think so. i don't think there's that much news in the report. the headlines of course are much better both on the establishment survey and on the household survey. on the establishment survey it's more sandy impact and on household survey it's participation rate. we're still seeing a gradual improvement in labor market conditions underneath all of the month to month noise but it's still pretty gradual. it's still quite slow. that was the impression i think prior to this and that's the impression still. >> seeing this came in above what you had expected, are you apt to revise upward any of your forecast for the economy? >> no. there's a very clear

identifiable reason for it which is that there is no sandy distortion. that was really pretty much the entire story. >> why do you think there was no sand y distortion? >> it's surprising. i would have thought given everything else that we've seen not just the disruptions and damage but also some of the other economic indicators but i guess it seems that by this survey week for the establishment survey things were basically back to normal in terms of people showing up for work and putting in hours. i would definitely be going with the labor department's view on this because they have much more granular information than any one of us. >> they say 369,000 people that couldn't get to work but were counted as being employed. that is perhaps the issue. >> this is a measure from household survey and also the case that household survey was conducted one week before the establishment survey. it's plausible that maybe in

has household survey there is sandy impact but not in payroll figures. >> does it alter your view for q-4 at large? >> it does not. our gdp estimate for fourth quarter is at 1%. that's based on numbers -- >> you saved this week? >> yes. we have been shaving a bit as incoming numbers have been on the weaker side. it's not directly based on jobs numbers. there won't be an impact one way or another from this. >> in terms of q-1 and next year, how much does the cliff factor in? we were talking with dr. blinder yesterday and we was worried and granted he did make clear it wasn't necessarily a cause and effect and won't certainly happen if we go over the cliff. if we go over the cliff and we're over the cliff for what could be a couple of months, it would have an impact on the employment rate. >> i think if you go over the cliff for a couple of months that would be a very, very bad event. there's no question. that would be, you know,

definitely towards the very worst case sort of end of the spectrum of possible outcomes. if you go over by a couple of days and you know that a deal is in the works, then it wouldn't be as a bigger deal but it still would cause some disruption so it's a very, very pornograpimpo event. >> what could the rate be if we do go over? would it add three points? >> that would be sort of medium sized recession. a three-point increase if you took the entire period and a medium sized recession from starting point of 7.7% of the unemployment rate would be a very bad outcome. >> given that scenario, we could expect bond yields to remain low for a very long time and the fed to be as accommodative as it

has. we've seen an incredible year for the bond markets and borrowing at low rates. what do you see going on. what do you think things reverse? >> we have yields up a bit. ten-year yield at 2.2% by the end of next year in an environment in which the cliff is softened and there's more fiscal drag in early 2013 than in 2012 so the economy is pretty slow especially early in the year. but then things gradually get better as you move through the year and second half is 2.5%. in that environment you would see modest upward pressure on yields. now, is it possible that you would get more upward pressure on yields. possible. you're starting from a very low level. if the economy were to accelerate more sharply. if we were to get a more expansionary fiscal year. if the payroll tax cut was extended i don't expect that but if that were to happen, that

probably would put more awkward pressure on longer term yields. >> setting up next week, fed meeting, an event or not? >> i think it's pretty clear what we're going to see in at least the broad outline. i would expect continued pace of asset purchases at $85 billion a month. that is widely expected. i think for good reason. i think that there are some questions about the details, of course, what are mature ranges going to be and things like that. you'll always have those kind of questions so there's uncertainty there. i don't think we're going to see a lot of new innovation beyond that sort of extension of the $85 billion pace of purchases. >> good to see you. thanks. still ahead, we're heading to the buckeye state to talk to former ohio governor ted strickland about jobs, fiscal cliff and a lot more and then pot smokers in seattle are

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marijuana possession becoming legal under washington state law on thursday. for those who are 21 and older. as marijuana legalization supporters rejoice, marijuana still remains illegal under federal law of course and the white house is weighing the response of federal law enforcement on that front. steve fox is director of state campaigns and government relations for the marijuana policy project. he joins us this morning from washington. steve, good morning to you. >> good morning. thanks for having me. >> just so i know, are you high right now? we've had some people on television the last couple of

days on various channels who admit not to be. >> right. i'm not. are you drunk? >> fair enough. i want to know where we're headed. first off, do you expect the feds to weigh in here and reverse this state law? >> well, we saw in "the new york times" there was an important article talking about the federal response. it's kind of troubling in fact. they are considering ways of getting involved and it seemed they were only focused on the negative and not the positive. we had a situation where 3 am million people in colorado and washington have voted to end marijuana prohibition. it seems like the federal government is listening to some people with more authoritarian tendenci tendencies like d.e. and drug czar than citizens of washington and colorado. >> how much of a victory does

this mark for you guys? >> this is a huge victory. the margins of victory in each state were 55%. this is people clearly having the choice and debates in both colorado and washington strong majorities all said marijuana prohibition doesn't work. it doesn't make sense to punish adults for using a substance less harmful than alcohol and we should get rid of the criminal underground and have it sold by legitimate businesses who will be licensed, regulated and taxed. >> and taxed. that's the point. in washington, d.c., 25% tax on the growers. 25% on distribution. 2 and the sales tax. does the price of the joint go up or down? >> that's washington state and not washington d.c. >> sorry. >> it's different in colorado.

it's only 15% exise tax in colorado. the market needs to shake itself out. at this point there's a huge additional cost built into the price of marijuana based on the fact that it's sold in a criminal market. once it is licensed and regulated, the price will certainly go down to some extent. >> how confident are you -- you talk about setting up a regulated functioning market for weed as if you just snapped your fingers. how do you make sure this stays out of the hands of those who are under 21? >> well, we've seen in colorado already a fully regulated market that is serving 120,000 medical marijuana patients and no reports of any marijuana being diverted from those stores to teens and moreover while the use of marijuana among teens has gone up 11% nationally, it's actually gone over the past two years 11% in colorado. so what we see is a regulated

market that can keep marijuana out of the hands of teens and we hope the federal government and president obama don't stand in the way of progress. >> we'll see what time brings. steve, thanks so much for your time. steve fox, marijuana policy project in washington. >> house speaker john boehner is to speak on the fiscal cliff negotiations in just a few minutes. we'll bring you those comments live as soon as he starts speaking. plus, former ohio governor ted strickland will join us. he says republicans are not acting in the best interest of the country when it comes to the fiscal cliff and explain exactly why he's saying that on cnbc. [ male announcer ] this is joe woods' first day of work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.

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let's get to the cme group. rick santelli has the reaction to the jobs report. rick. >> thanks, melissa lee. all i can think of today is scratch lotto tickets. don't scratch the unemployed. here's a lotto ticket and i'll tell you what. when i went to buy this as a prop, i'll admit. you can't make this up. $5 a week for life. no, this is not an advertisement for unemployment compensation, even though it's roughly the same amount. but, yes, even though talking about experts today, we have

data on employment and i saw a lot of scratching on the surface in interpreting the data and digging in on sandy. i understand superstorm sandy is a horrible thing and my hart continues to go out for people who are still distressed over that storm. but we need to dig down deeper, people. all you experts and economists out there, and i'll tell you why. i like to go to the bureau of labor and statistics website. they give you great definitions. now, we know today, we created 146,000 jobs. that's the establishment survey. if we look at where the unemployment rate comes from, different calculations, some interesting things pop up. first of all, let's talk about the civilian labor force. now, what is the civilian labor force? according to the bureau of labor and statistics that includes adding up all the employed and unemployed. that was pretty easy. that was minus 150,000.

there's another category. not in labor force. what does that mean? that means if you're not classified as employed or you're not classified as unemployed, you've just been beamed to a plan it, scotty, and you're off the grid completely. that number was 542,000 more than last month. so when you think about 146,000 jobs, and i understand that's apples, and the oranges are minus 450,000, minus 542,000 not the labor force, it's a bit different, but it really drives the point home. listen. if we're really going to solve our unemployment problem versus putting people on $500 a week for life -- and i understand they need help because we need a better plan to talk about what's really going on, even if it's things like demographics or students. i'm not saying it isn't. but in the end if we don't do something about this. we're going to have an unemployment rate of zero because we're ghoingt to count

anybody as unemployed. back to you. >> have fun with numbers. that's how it works. we'll see you in a few minutes. >> looking to upgrade your office desk? would you spend close to a million on a cube cal overhaul? some people might, more when we come back on today's million-dollar minute. [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean. enjoy free shipping wooohooo....hahaahahaha! oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico. fifteen minutes could save you fifteen percent or more.

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in today's million-dollar minute how much would you pay for a royal upgrade to your office desk? it's a small fortune fit for a king. robert frank explains. >> to really have power, you need a real power desk. you're looking at a mega desk built for royalty. >> this is a desk designed in 1929, and the estimate is $2 million to $3 million. he described it with an indian prince in mind. >> it's over 80 years old but it comes with some very modern luxuries including a heated footrest. it hits the auction block at christie's with about 200 other items worth about $214 million. >> it's one of the most

important art deco works that has ever come up for sale. >> just this piece of leather looks like a jackson pollock or unique abstract. >> you can see all the work that was done on it. >> and all the money that was made at this desk. >> that's right. >> from my power cubicle at cnbc, i'm robert frank. i think that desk screams simon hobbs. >> with that ink that just looks dirty where he sat. art deco, yes. dirty area, here, no. surely. you'll sympathize with me, carl. >> heated footrest. >> then your feet will get too hot in the summer. >> it's not heated all the time. you can turn it off. you would presume for that much money it would have an on/off switch. >> the big jobs reports shows 140,000 were created last month. we asked you to tweet us your

predictions. right now our team is coming through all of the entries and there with many of them. the winner will receive a picture frame autographed by the "squawk on the street" gang. >> there it is, by the way. we wanted to show it, demonstrate it. >> i don't believe i sign thad. >> really? >> yeah. >> sign it now. >> i will sign it now to might official. >> notice were were kind enough tot to make you accept a picture of us. you can put your own pi in there. you stair at us all day as it is. >> we should point out after couple of names. fcx reversing quite aed by. avon is up more than 5%. >> yep. in its latest filing blackrock exposed a 5% stake in the company. who knows if that's the reason why. that's out there. also we're watching shares of avp. big gain. >> avp is down sharply since -- as you can see since member cody

came and then left in terms of making an offer for the company. avon, largerc coty. >> we're seeing some weak ps in housing-related names. i thought the whirl poopool interview was interesting. he did say demand trends are still negative, although by a small amount and we're off the 26,000 high. speaker boehner is about to speak. here he is. >> when it comes to the fiscal cliff that's threatening our economy and our jobs, the white house has wasted another week. you know, eight days ago secretary geithner came here to offer a plan that had twice the tax hikes that the president campaigned on. it had more stimulus spending than it had in cuts. and an indefinite, infinite

increase in the debt limit like forever. four days ago we offered a serious proposal based on testimony of president clinton's former chief of staff. since then there's been no counteroffer from the white house. instead reports indicate that the president has adopted a deliberate strategy to slow-walk our economy right to the edge of the fiscal cliff. instead of reforming the tax code and cutting spending, the president wants to raise tax rates. but even if the president got the tax rate hike that he wanted, understand that we would continue to see trillion-dollar deficits for as far as the eye can see. listen. washington's got a spending problem, not a revenue problem. if the president doesn't agree with our proposal, i believe that he's got an obligation to families and small businesses to offer a plan of his own, a plan that can pass both chambers of

the congress. we're ready and eager to talk to the pretty about such a plan. >> speaker, you did speak with the pretsident earlier this wee. can you talk about that call? also we understand that he's making clear that it's got to be increasing rates for the wealthy or no deal. are you willing to give a little bit, maybe not all the way to 39.6%? >> it was -- the phone call was pleasant, but it was just more of the same. the conversations that the staff had yesterday. just more of the same. it's time for the president, if he's serious, to come back to us with a docounteroffer. >> mr. speaker, it's been indicate thad the job reports numbers are down from last year. it could obviously hurt american jobs prospects. you always say where are the jobs? they seem to be coming along. why take a risk when the jobs

numbers are improving? >> because the risk the president wants us to take, increasing tax rates, will hit many small businesses that produce 60% to 70% of the jobs in our country. that's the whole issue here. >> what was -- >> no, no, no, no, no. you violated the rules. torre. >> he said the economy would go off the cliff. what's your reaction there? >> i think that's reckless talk. >> before the election you would be able to heighten it, that flat tax would not go up. >> listen. raising taxes on small businesses is not going to help our economy and it's going to help those seeking work. i came out the day after the election to put revenues on the table, to take a step toward the president to try to resolve this. now, when is he going to take a step toward us? >> can you see some way that you

could agree to tax rate increase and protect small businesses at the same time, maybe going with the 37% or some middle ground? >> there are a lot of things that are possible. to put the rev new that the president seeks on the table, but none of it's going to be possible. the president insists on his position. insists on my way or the highway. now, that's not the way to get to an agreement that i think is important for the american people and very important for our economy. thanks. >> and with that, the market gains fading just a touch. of course, speaker boehner saying that the white house has, in his words, wasted another week. no real progress to report. the phone call with the president, he says, was pleasant, but as he said, more of the same. i want to bring in cnbc chief correspondent john harwood. john, there's been some comments that because the talks have narrowed because of the

participants that's a group siechblt does this negate that? >> i don't think so. look. it's always difficult to tell, carl, what's happening. a lot of times you've got the appearance of an absolute gridlock and a thawing going on behind the scenes. we don't really know. he did say that tim geithner in his comment to steve liesman earlier in the week when he said we'll go over the fiscal cliff if we don't get higher rates was reckless talk. the staff resumed conversations yesterday in the phone call between speaker boehner and the president that you mentioned. so it's difficult to tell. i still believe as i've said ever since the election that the conditions are emerging for a potential deal, but you've got to get there when the speaker can rally his troops behind the sort of deal that the president will accept.

the president believes he holds the high ground. he has all the tax cuts expiring at the end of the year and the question is do we have to go over that cliff before a deal can be struck or not. >> we asked you yesterday whether or not progress was taking place at least on the staff level. you said there were differing opinions. has the needle moved on that front? >> well, the movement of the needle was that yesterday the staff resumed conversations after a little hiatus over several days before that, so that is a progress in and of itself that they're talking, but there's no indication that those conversations have produced any sort of breakthrough because we would have heard about that from speaker boehner today. >> all right. we'll come back to you soon. i want to bring in former governor of ohio, ted strickland. good to have you this morning. good morning. >> good to be with you. >> nice to have you on after the speaker. the white house says you owe

them a counteroffer. do you? >> we had an election. they raised the rate an upper 2%, a critical part of his campaign. over 6 07. at least 60% of the people in this country agree with the president, and for him to say that secretary geithner's comment that this was an essential part of the negotiations was irresponsible. i don't understand that. this has been out front and center for a long time. it was a critical part of this election process. the people are with the president. we ought to accept this, i think, and move forward and then deal with some of the other iss issues, but rates on the top 2%, i believe, must go up, and until the republicans accept that, we have gridlock. >> but i'm curious, governor. if you're really interested in engaging with your counterparty and engaging with the white

house would you come out and use that word, absolutely, we're willing to go off. is that construct toiv the process at all? >> i think it's important for these talks and the communication to be straightforward, candid, and honest. and if that's where the president is and the secretary was accurately reflecting where the pretty is, then it's appropriate for him to be that definite in my judgment. we don't need to be playing games. we need to be candid and honest and direct with each other during these negotiations, and i think that's what the secretary was doing, just being honest and candid about where the president is and what his position is on this very critical part of the negotiations. >> we've got some jobs numbers out this morning, governor, that the margins are good. we're still sorting out the effects of sandy and all that. i wonder, though, do you think the comfort level of the administration and playing

hardball, is that real? do they have more of a cushion? >> well, i think this country is poised for growth due in great part with the leadership that the president has exhibited over the last several months and the positions they've taken. we, i believe, are in a position here in this country to see real growth going forward, and that's only going to happen, though, if we're able to come together, reach some kind of reasonable accommodations, and move forward. but i do believe the president is in a very strong position in part because of all the evidence they're indicating this economy is in a growth pattern. we need to accelerate that obviously, but all of the conditions are there, i believe, for economic expansion and growth. and that's good news for the president, for all of us, for

ru republicans as well. >> i appreciate your insight. incredible. thank you very much. >> thank you so much. >> ted strickland from ohio. after the break we'll get market analysis. we'll talk about that jobs number. first, though, rick santelli's working on something for a little bit later in the hour. morning, rick. >> yeah. in about 20 minutes, i'm going to teach everybody out there the hand signals. we're going to have charles beaterman. we're going to talk about today's data to is the u.s. government committing fraud to what the fed may do next week, all in 20 minutes at the bottom of the hour. the number is out. >> november nonfarm payrolls increase by 146,000 jobs. >> were you able to nail the number? if so, you may be the winner of this picture frame. signed by the "squawk on the street" gang. find out if it was you later on "squawk on the street." [ male announcer ] what can you experience in a seat?

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the dow is up nine points. i want to get a quick sector breakdown. tech and telecom doing the worst right now. the markets, of course, mixed after this morning's jobs numbers and comments moments ago from house speaker john boehner. art, good morning to you. >> good morning. >> happy friday. markets now even responding to just the announcement that

someone will speak later on in the morning. >> yeah. i think it's interesting for viewers to note we probably got two bites out of the same apple. when rumor spread that babier would be making a statement, markets pulled back. they had rallied back after the university of michigan data. they were back at the morning's highs. people said, wait a minute. if it's a deal, wouldn't both of them be making a statement. it's something that you keep in the back of your mind. if you ever hear they're going to make a joint statement, the mashlt will probably take off, sensing that that's the deal. this morning they pulled back in anticipation of his speaking because he was speaking along and then they pulled back on his statement which seems edseemed progress so far. >> it might be a free pass. so many different variables. sandy, the election, holiday workers. you say three asterisks. >> yeah, i think it has to have three asterisks, it doesn't fit in with initial claims and other

items. they said sandy had no impact on the number. i think that may be because the number was basically taken before the impact was held. i think they're going to see a lot of revisions here. >> next week setting up. it's going to be another big one. same store sales from various companies and, of course, the fed. >> the fed is important. it's another one of those two-day meetings. they're going to take down operation twist. this will be important because he gets to announce at a press conference. that gives them a chance to explain what the mood of the meeting was. it will give them a chance to hear what the new proposal, qe whatever, is supposed to do and how they want to set it up. so i think the markets will hone in on that very, very carefully. >> do you think we see an acceleration of purchases, a revamp of twists? will there be an event as i said earlier? >> i think it's going to be outright purchases rather than twists. that was kind of sanitizing

things. that will raise some people's worry about inflation, but, you know, there's no velocity in the money, so we have no inflation going in here. it will be very interesting to see what he does. there's, in fact, a wide rumor around that he'll have difficulty. i'm trying to check that out. there are people saying that they're almost looking for a one-issue market we know the paper's not out there, but when it is, we like to buy it up, kind of a precommitment. take it with grain of salt because i haven't been able to check up on it. >> santa usually comes around this time of year if he's going to come at all. has the cliff suppressed him. have they stolen his reindeer? >> i think we're at the point with we have to put his picture on the milk carton. he seems to be noticeably absent except for in the shopping malls. he hasn't been seen on wall street just yet. >> i want to send it over to courtney reagan.

>> take a look at shares of sears. you can see that they're moving a little bit higher. there are analysts comments from a boutique research company. they indicate that sears domestic increase in november thanks to strength in apparel. the company itself making these comments does have a neutral on the stock. we spoke to another analyst who does expect to underperform long term. out of all the analysts that rate this, there are only five of them, there are no buys on the stock. we want to point it out. carl, remember. it's a small float. somewhat small movements can cause pretty big spikes in incentives when we look at shares of sears. >> courtney, thank you so much. >> it's always cloudy but now things are hazier. is there a price war brewing between the marijuana clinics and the criminals? jane wells will investigate after this break. if you are one of the millions of men

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there are a lot of things that are possible. to put the revenue the president seeks on the table, but none of it's going to be possible if the president insists on his position, insists on "my way or the highway." that's not the way to get to an agreement. >> that was house speaker boehner moments ago. our deal meter which measures how close to a deal we are now dropping back a quart ore of a way toward the resolution. that's down from halfway there earlier this morning before the speaker began his comments. if the fiscal cliff has you nervous, this may be some relaxing news. as of midnight last night,

washington is now the first state in the united states to legalize marijuana for adult recreational use, but the law is not without complications. jane wells is live in l.a. with more on that story. good morning, jane. >> hi, carl. lighting up in seattle is one thing. figuring out how these laws are going to work is another. pot possession may be legal in washington, but it will be another year before the state sets up the bureaucracy, creating a network of legal growers and retailers. they're going to have to set standards for thc. but what about pricing? the state is hoping to raise $600 million a year for pot and they say it could add 5% to gross state product by 2017. but ktlu reports the state's office of finance management says retail prices and medical pot clinics are already $3er gram higher than street prices and you add in taxes. are people going to pay more if they can get it for less.

and in colorado, its pot law goes into effect next month but the governor is in no rush. the voters approved it. colorado's general attorney told us even the medical marijuana law there wasn't working. >> what we have in colorado today is a sham. it's not going to be helped by legalizing it on a state level when it's still legal on a state and federal level. this really needs to be addressed on a federal level. >> final you can buy it out of a vending machine. there's been a crackdown of epic proportions on proliferation of performance. for example, this machine is made by medbox. just over a week later it was worth over $2.7 billion before dropping down.

analysts say big tobacco isn't going to touch it until the fed legalizes it, which leads to a huge void. they're starting a gourmet marijuana brand in washington. quote, this is the first and maybe the most where we know a $50 billion to $100 billion material market is going to come in overnight for which there is not a single brand. >> that does not happen in this economy. >> nope. >> stick around for a moment. i want to get your thoughts on this, jane, because "the washington post" is out with the ten worst ideas of 2012. some of these are right in our wheelhouse. the highlights are like the secret servicemembers' trip to colombia, refs, cheating at badminton. inviting the chief to speak at the rnc. the facebook ipo, jane, is on the list. romney's comments on the 47% and

apple coming out with its unreliable map service. it's amazing the percentage of worst ideas, at least according to the post are the worst. >> here's mine. honey boo boo. worst idea ever. sorry. lifetime channel. learning channel. tlc. >> discovery wants you, jane. thanks. we'll get the close and details on the impact here. dow's up back above 30. a lot of it back and forth is just what apple is doing. back in about three minutes.

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we've got a lot of news. simon hobbs is going to boil it down to two really big stories. >> i think there are two that we're watching for american investors. one is greece, one is italy. the developments today are both good from an american investing perspective because they keep a lid on what's happening in those two respects. in greece there was trouble on the streets of athens last night as a result of left-wing protesters and students out and police using tear gas to disperse them as they protested the death of a teenager as a result of a police shooting four years ago, but the more important thing from a market perspective is that in 30

minutes' time now, the book will close on the greek debt buyback. now, remember what's happening here. the greek government is borrowing 10 billion euros from the rest of europe to buy back its own debt at a discount. if it does that successfully, by midday our time when that book closes, then more cash will flow through from the rest of europe, possibly next week it will be able to repay its bills and capitalize on the banks. let's check the close. >> the european markets are closing now. >> so we kind of went nowhere today. a lot of these markets in europe are very focused the fiscal cliff and the two stories that i'm giving you. so let's just complete where we are. on the first of those, the book closing midday even time our time and the attempt by the greek government to buy back that debt below -- way below face value in order to cancel future payments. you'll see we had this rally in the greek bonds.

that's halted today as potentially the hedge funltds sell. but more importantly is whether the banks would sell, the greek banks, the four greek banks, national bank of greasece and alpha bank, they will sell their greek bonds back to the government at a fraction of their face value and the government says it's your patriotic duty to do so and we'll protect your shareholder values. the argument goes it's your patriotic duty and of the 30 billion euros that will come to the greeks from the rest of europe for doing this, they will use the majority of that to recapitalize these banks. the second story that i want to tell you about is what is happening in italy, and there, of course, you have the standoff between silvio berlusconi, the former prime minister, who this week withdrew his support for

the existing mario. they will not call for a dissolution of the par lament or the government in italy. that is a promise made by berlusconi. that is good news because as far as barclays capital is concerned it doesn't matter for the markets. what you really need is a stable government and saying to the opposition, look, if do you empower, make it clear you're going to come through with reforms that are already on the table. in that environment, the fact that we're not going to have a disorderly dissolution in italy, you've seen the yields, in fact, fall on the italian debt. so after yesterday, the yields spike. in other words, the bond market is rising and a little bit more. >> do you think there's as th ce he runs again, berlusconi? >> probably not. the reason he did that, withdrew his support is -- the expectations is not that he'd

run, but who knows. the man is a dash the m-- the m character. >> yes, he is. have a great weekend. sharon epperson is live at the nymex. good morning, sharon. >> good morning, carl. it was fast and dramatic, particularly in the gold market where we saw a big selloff in gold initially on what was a better than expected number. but once traders parsed through that number, they saw there was more to it than the first headline. as we look at gold prices right now, they're basically unchanged, right around $1,700 an ounce. the oil, now near the lows of the session. in terms of crude oil, they have really been range-bound and they continue to be that way, though, of course, at the lows of the day. there's a lot for traders to watch in the days ahead and that's why they say they're not making any significant bet. also what's going to happen with the fed meeting and an opec meeting on wednesday.

back to you. >> sharon, thank you so much for that. bob pisani is here at post 9. i'm sure you're going to talk about market action as it relates to what the speaker said a few moments ago. >> did you watch john boehner the speaker of the house? normally coolool and collected. looking a littles by frustrated. two-sentence answers. a little unusual for the speaker of the house and sort of very brusque and basically walked off on the press conference very quickly. good reason to be frustrated. let me give you some of the highlights of what a lot of people are talking about here. forget everything. don't go over the fiscal cliff but pass a simple tax bill. what would it entail? expend the tax cuts to those making under $250,000. increase taxes on dividends and capital gains to 23.6%. number three, know estate tax,

payroll tax cut, unemployment benefits extension. basically strip everything out. no delay in sequestration. does this look like it would satisfy wall street? i don't think so. remember two essential points. it's got to be done before the end of the year and be substantive. this is pretty stripped down but this is what a lot of people are talking about that this might be all that you're able to get through. people were hoping for a bigger deal, if not a grand bargain, at least address some of the other issues. let me move on. the dow's up a little bit because of high-priced stocks like ibm are up. but we're having a great day again for financials. it's been a great week overall, but this is just today. jpmorgan chase and morgan stanley and citi announcing job cuts. bank of america, i'm sorry, announcing the cuts. let me tell you what's happening.

even though the markets are flat, there are some very good moves this week in computer hardware. forget apple. semiconductors had a great week. banks were up just a bit. housing for the first time in a while to the down side. gold and gold stocks had a terrible week even though gold is up a little bit today. just take a look at some of the big computer hardware names. i want to distinguish apple from the others. look how well these stocks are. seagate has had a tough time, dell has been a disaster, hewlett-packard has been a disaster. but all of them have bottomed. this is what you call real momentum play, trying to find a bottom. i can tell you the street has voted the week the bottom is there. >> you've got that right. apple down nine of 11 weeks. that's a stretch since '509. >> pretty tough time. >> thanks, bob.

bob pisani. take a look at eastman chemical hitting a record high. still worth noting, the company is issuing a dividend or increasing its dividend up. it will be payable. this is the third dividend increase in two yearings for the chemical company. carl. >> that's quite a chart. let's get to rick santelli talking to a special guest this morning. rick? >> absolutely. a lot of people know it. he wields one mighty pen. welcome, charles. >> good to be with you live. >> absolutely. listen. three topics. first topic. you saw the data today from the bls. some comments, observations you can share with us?

>> well, my overall observation, i have no idea why anybody looks at this data as if it means something as it gets revised every essentially months and. >> one looks at the predictions. the way it's compiled, it's such a joke and farce. >> one of the things you wrote, u.s. government guilty of financial fraud. they would be guilty of financial fraud. wow. those are pretty powerful words. tell us exactly what you mean. >> it's based on surveys cha is modified by historic da tarks

and they totally ignore realtime data that's currently available. whenever anybody gets paid within the income withheld employment data sent to the treasury, it including real-time data, how much people are making, where they're working, geographic location, and the government doesn't want to use that data. it ignores it. it makes believe it doesn't exist, and there can only be one reason and that is to protect the jobs of those doing it the way they're doing it now. the census bureau reports estimates of retail sales based on 3,000 retailers. they totally ignore real-time data from mastercard, visa, on retail sales in real-time. and then there's the worst -- >> you know, many years ago, charles, there was a man names mr. lis owe. he used to write the lissio report. he's been dead for many years. >> and he was a good buddy of

mine at berens. >> we're talking what, over a dozen years ago. >> yes, yes. >> all right. my last point. we have a fed meeting next week, circumstance and there's a lot of talk about qe4, there's a lot of talk about the twist. there's not enough two years left to sell. there's current talk, which is unsubstantiated but whispering out there maybe there's not enough mortgages to continue the programs at current rates. what are your thoughts on all the programs and what the feds will do next week and how it may impact or not impact the economy and jobs. >> well, the fed is no longer the main issue. we've gone to what companies did to now it's what the governments do. there's absolutely no way the u.s. economy can grow fast enough so that tax revenues will ever be able to pay current bills even if current spending doesn't go up. that's the same in europe and the same in japan. the last part on the financial fraud that i think is very important. the amount of present value of unfunded future medicare,

medicaid, and government pension liabilities is $87 trillion. that $87 trillion is greater than the net worth of the $63 trillion net worth of the united states. that number grew by $7 trillion. any accountant would have to say the u.s. is not a going concern. these debts are being hidden, not being reported. and i don't understand why. >> well, charles, you always get me thinking. maybe i don't agree with everything you say, but today i think i pretty much agree with a lot of it. thank you for being our guest. carl, back to you. >> all right. rick, thanks so much. in a job market that seems to be stabilizing, there are industries that still can't find the workers they need. we're highlighting two of those industries and finding out why businesses are so desperate to hire right after the break. ...at the best schools in the world... ...you see they all have something very interesting in common.

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and ink helps us do it. make your mark with ink from chase. ♪ [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean. coming up on halftime, apple work on its worst week in more than a year. what should you do with the most valuable company on earth? is it time to order up mcdonald shares? they square off and debate it. and is santa claus getting ready to visit wall street. all that and much more, carl, at the top of the hour. we'll see you in about 15 minutes. >> cisco stocks sliding.

let's get back to courtney rag snoon take a look at shares of cisco. you can see we're continuing to fall. the company is holding its forward-looking conference in new york with investors and some media today, and ceo john chambers is saying that the company has gone too long without a major acquisition. he does see the tech giant being more active in m and a going forward but the ceo confirms the growth. the stock is sliding. we're going to continue to watch and listen for the markets that are market moving. carl. >> thank you very much for that. in the world of manufacturing, there's a growing problem that is frustrating owners and managers. they cannot find people to fill jobs in their second and third sits. phil lebeau is live with more with this fascinating shifts. >> they say, there's no way. if people want a job, they should be able to find one. really?

they found many places where they're trying to hire like here. go to indiana where if you look at the state unemployment rate, yes, it has come down from the peak of 10.8% back in 2009 but it's still above the national rate at 8%. we wjt down to bloomfield, indiana, which is just south of bloomington, and down there is metal technologies incorporated. this is an auto parts supplier. they make oil pans that then go on to top tier suppliers. they have four to seven job openings that they cannot fill. they struggle to fill their second and third shifts. part of it is because they can't find people with skills. part of it is because they've offered jobs to people who have said, no, thanks, i'll stay on unemployment. >> it seems like with the unemployment as high as it has been it shouldn't be hard, but we have situations where people either aren't interested in working or they don't fit our

our needs. >> this is a huge problem for the auto parts suppliers in part because as you take a look at the s&p auto parts index, these guys have moved to second and third shifts to keep up with demand, and if they can't meet demand, carl, ultimately they're going to lose business to competitors here not only in the u.s. but elsewhere because the market will go to where they can find that demand being met. so for manufacturers like here and in indiana, they need to bring people in and hire people, but they're struggling do that right now. >> that has big implications, fill. big implications on markets and the dynamics in this country. really, really interesting. phil lebeau in illinois. thank you. homebuilders are desperate for workers. some having to delay projects because thap they don't have the crew. diana olick is in washington with more on that. diana? >> that's right, carl. construction has been bumpy to say the least. the problem is they need really

skilled workers and that's why the students are feeling new power in the power tools. why? because from here to texas all they're hearing from builders is we need workers like you. >> about two weeks ago we started getting calls like maybe seven or eight a day and we were asked to bring students to work sites. >> a far cry from a few months ago when linda was begging homebuilders to hire sfrunlts the job corps program. >> there was nothing going on. >> now they're in high demand and they know it. >> there's a resurgence in construction, so i know this is the place to be. >> housing starts climb to an annualized rate after falling to a low of just around half a million in 2009 when the industry and the trade were decimated. >> over 2 million workers left the construction industry, and

most of those are not coming back, so we have a great need to have skilled workers. >> with instructors from the nonprofit home building institute these students learn plumbing, weatherization, painting, all the construction skills you would see on a residential or commercial site. so the big question is why did all those workers who left not come back? well, remember, this housing recession has been going on for almost five years now and a lot of them have retrained into other careers. another point to make that is very important, if we go over the fiscal cliff, not only will the housing recovery come to a grinding halt, but programs like this one, training skilled workers will also lose. we're going to talk about that more coming up on the "closing bell." carl. >> huge dislocations in labor because of what's happened to housing. great piece. diana olick in washington for us. here's a question. do you like art by monet? if you do you may like pieces by

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you're off. farm payrolls increase by 146,000 jobs. the unemployment rate is 7.7%. >> that was hamptom pearson breaking the jobs numbers report this morning. marleau dean is part of this month's #nailthenumber winner. he works as a planning manager at toyota motor sales, a u.s. army veteran, a runner, and, of course, a cnbc junky. congratulations to marleau. marleau, if you're watching, send us a twitter message. let us know where we can ship your prize. and, of course, remember to win, you muss use the hash tag when

tweeting. when we come right back, this morning's job number a little more confusing. we're going to break it down in just a moment. "squawk on the street" will come right back. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.

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markets up 29. joe grekco joins us at post 9 from equity partners. joe, good morning to you. thanks for coming in. >> good morning. >> whether it was the jobs data or commentary from jobs companies, housing, we're all betting the house on to a large degree, maybe isn't quite there in the way some people think. >> nice little pun there. yeah, you know, i was actually a nonbeliever for quite some time. i was made a believer. sometime over the summer i realized -- >> she's very convincing. >> you know, 2013 is the year where we really start to look at how things are going to come together and what it means not only for recovery but the jobs front and clearly housing or construction is where we're lagging the most. people who are out of work and missing in the labor force.

that's where we're going to see market employment and nonfarm payrolls. >> how did you guys strip out your expectations for the sandy effect, right. >> it wasn't. to give a little credit on the street. i looked at what diane had to say about it where she said it's not in there yet. it seems to me like something's missing, you know, to paraphrase. and i believe that's the case. at that point you can't really say that, you know, the number is 100%. of course, you also have to look at the percentage of the number of people who are dropped off from the count and what that really means. you know, economists will tell you what the real implications mean and whether or not you

should be looking at the number with as much weight as it used to have because they do change the parameters. aisle call your attention for a minute if we can roll back a little bit. you look at just how people -- how the calculation comes in, the shifted -- the adp which came out earlier obviously in the week, they shifted the calculation. they added nearly a million job loss to the count, you know, so that number, when you really look at it in retrospect says we're actually a little bit worse off and we're not doing as well as people like to say. >> meanwhile boehner comes out. however things are going, it's not moving in the direction the market would like to see, but we didn't suffer too much. why? >> no. knee-jerk reaction and a onfrom the market. we bounced off a level. we seemed to be sitting at that level. it seems like that that's pretty much where the market's going to say probably till the last hour or so, which is where i anticipate we'll drift a little higherbs